# Publication 4450 (Rev. 3-2022) Catalog Number 39720Z > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A92def6d193c3da29 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Fiscal Year 2023 Congressional Budget Justification & Annual Performance Report and Plan Publication 4450 (Rev. 3-2022) Catalog Number 39720Z Department of the Treasury Internal Revenue Service www.irs.gov Table of Contents Commissioner’s Message .......................................................................................................................................................... 3 Section I – Budget Request ....................................................................................................................................................... 4 A – Mission Statement .......................................................................................................................................................... 4 1.1 – Appropriations Detail Table ....................................................................................................................................... 4 B – Summary of the Request.............................................................................................................................................. 10 1.2 – Budget Adjustments Table ........................................................................................................................................ 12 C – Base Adjustment and Program Changes Description............................................................................................... 13 Maintaining Current Levels .............................................................................................................................................. 13 Pay Annualization (2.7%) ................................................................................................................................................ 13 Pay Raise (4.6%) ............................................................................................................................................................. 13 Non-Pay ........................................................................................................................................................................... 13 Base Adjustment ................................................................................................................................................................. 13 Program Increases .............................................................................................................................................................. 14 1.3 – Object Classification (Schedule O) Obligations ...................................................................................................... 18 D – Appropriations Language and Explanation of Changes .......................................................................................... 19 E – Legislative Proposals .................................................................................................................................................... 28 Section II – Budget and Performance Plan ........................................................................................................................... 29 A – Strategic Alignment ..................................................................................................................................................... 29 Taxpayer Services ............................................................................................................................................................... 31 2.1 – Budget Adjustments Table ................................................................................................................................... 31 2.2 – Object Classification Obligations ........................................................................................................................ 32 2.3 – Appropriation Detail Table .................................................................................................................................. 33 2A – Pre-Filing Taxpayer Assistance and Education ................................................................................................. 33 2.1.1 – Budget and Performance Report and Plan ...................................................................................................... 36 2B – Filing and Account Services ................................................................................................................................. 36 2.1.2 – Budget and Performance Report and Plan ...................................................................................................... 40 Enforcement ........................................................................................................................................................................ 41 2.1 – Budget Adjustments Table ................................................................................................................................... 42 2.2 – Object Classification Obligations ........................................................................................................................ 43 2.3 – Appropriation Detail Table .................................................................................................................................. 44 2C – Investigations ......................................................................................................................................................... 44 2.1.3 – Budget and Performance Report and Plan ...................................................................................................... 47 2D – Exam and Collections ........................................................................................................................................... 47 2.1.4 – Budget and Performance Report and Plan ...................................................................................................... 52 2E – Regulatory.............................................................................................................................................................. 53 2.1.5 – Budget and Performance Report and Plan ...................................................................................................... 55 Operations Support ............................................................................................................................................................ 56 2.1 – Budget Adjustments Table ................................................................................................................................... 57 2.2 – Object Classification Obligations ........................................................................................................................ 58 IRS-i 2.3 – Appropriation Detail Table .................................................................................................................................. 59 2F – Infrastructure ........................................................................................................................................................ 59 2.1.6 – Budget and Performance Report and Plan ...................................................................................................... 61 2G – Shared Services and Support ............................................................................................................................... 62 2.1.7 – Budget and Performance Report and Plan ...................................................................................................... 65 2H – Information Services............................................................................................................................................. 66 2.1.8 – Budget and Performance Report and Plan ...................................................................................................... 69 Business Systems Modernization ....................................................................................................................................... 70 2.1 – Budget Adjustments Table ................................................................................................................................... 70 2.2 – Object Classification Obligations ........................................................................................................................ 71 2.3 – Appropriation Detail Table .................................................................................................................................. 72 2I – Business Systems Modernization .......................................................................................................................... 72 2.1.9 – Budget and Performance Report and Plan ...................................................................................................... 75 B - FY 2021 - FY 2023 IRS Integrated Modernization Business Plan............................................................................ 76 C – Changes in Performance Measures ............................................................................................................................ 79 Section III – Supplemental Information ................................................................................................................................ 80 3.1 – Summary of Capital Investments ............................................................................................................................. 80 3.2 – IRS Performance Measures Table............................................................................................................................ 86 3.3 – Return on Investment (ROI) for IRS Major Enforcement Programs................................................................... 87 Section IV – Appendix ............................................................................................................................................................ 89 4.1 - COVID-19 Supplemental Funding............................................................................................................................ 89 4.2 - Carryover Investments from FY 2022 Congressional Justification ....................................................................... 90 4.3 – Summary of IRS FY 2023 Cyber Security Budget Request ................................................................................. 101 4.4 – Summary of IRS FY 2023 Budget Request ........................................................................................................... 102 IRS-ii Commissioner’s Message The Internal Revenue Service (IRS) is the primary source of funding for the United States government and collected more than $4 trillion in gross taxes in FY 2021. As the past year shows, we are more than a tax administration agency. We also make it possible for the government to perform its vital functions and be effective on everything from education to defense. The unprecedented events of the last two years illustrate the significant role the IRS plays in the overall economic health of our country. We have effectively supported economic growth and recovery while fulfilling our core mission, including delivery of two extended tax filing seasons. Now we’re planning for a new organizational structure and an increase in our workforce that will position us well for the future. These endeavors will also further the IRS’s efforts in delivering a stellar taxpayer experience. Given the importance of the IRS to the nation, I believe it is essential for me to leave the agency in a stronger position, with greater resources, when my term ends in November 2022. At a time when the IRS has faced consequential resource challenges, we have taken on new responsibilities affecting almost every American. IRS employees’ heroic efforts during this national crisis included distributing three rounds of Economic Impact Payments totaling more than $800 billion as well as more than $500 billion in individual refunds since the spring of 2020. In 2021, we were called upon to implement portions of the American Rescue Plan Act, including the provision for advance payments of the 2021 Child Tax Credit (CTC) to provide much needed help to eligible Americans. We issued the first round of more than 35 million Advance CTC payments on July 15, and further monthly payments were made through the end of calendar year 2021. The IRS worked hard to deliver this program quickly, efficiently, and on time. In June, we sent more than 36 million letters to people who may be eligible, to let them know about this benefit, and stood-up an online portal allowing taxpayers to make updates to their accounts or opt out from receiving the advance CTC. Like all federal agencies, the IRS is best able to fulfill its mission – providing the services Americans deserve and appropriately enforcing the tax laws – when it receives the resources it needs. We anticipate over 60 percent of our 83,000 employees will retire within the next six years. Building back a strong workforce, augmenting taxpayer services, and establishing proper support functions are my top priorities - and the premise of this budget request. An appropriate level of consistent, multi-year funding will allow the IRS to continue enhancing the taxpayer experience, narrowing the tax gap to ensure equitable administration of the tax code, protecting IRS systems and taxpayer data, and modernizing our information technology systems. This request will address the IRS’s paper inventory, bolster our telephone level of service, and continue developing innovative approaches to understanding, detecting, and resolving potential noncompliance to maintain taxpayer confidence in the tax system. Efforts to expand the use of data, analytics, and artificial intelligence across all lanes in the audit process, from selection to examination will persist. We are making a difference and we want to continue to successfully pursue our mission on behalf of our great country. Chuck Rettig Commissioner IRS-3 Section I – Budget Request A – Mission Statement Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all. 1.1 – Appropriations Detail Table Dollars in Thousands % Change FY 2021 Appropriated Resources New Appropriated Resources: Taxpayer Services Pre-Filing Taxpayer Assistance and Education Filing and Account Services Enforcement Investigations Exam and Collections Regulatory Operations Support Infrastructure Shared Services and Support Information Services Business Systems Modernization Subtotal New Appropriated Resources Other Resources: Reimbursables Annualized CR3 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE 25,989 $2,587,606 27,990 $2,763,606 32,865 $3,385,723 33,041 $3,684,593 17.42% 22.51% 18.05% 33.33% 4,514 21,475 34,989 3,012 30,987 990 12,037 5,536 22,454 35,604 2,965 31,615 1,024 11,631 2.29% 2.68% 33.77% 10.95% 11.61% 26.36% 17.12% 17.66% 17.37% 9.26% 15.66% 13.19% 8.14% 21.25% 39.20% 18.30% 8.44% 20.42% 9.06% 9.38% 9.22% 3.32% -0.93% 4,783 6,740 412 83,807 866,539 2,818,054 $6,272,313 838,596 5,228,803 204,914 $3,833,734 405,408 1,125,014 2,303,312 $310,027 $14,100,667 7.79% 19.79% 8.43% 8.70% 8.59% 2.83% 2.51% 5,183 6,740 412 83,807 803,873 2,581,850 $5,861,649 785,121 4,883,575 192,953 $4,543,268 1,039,852 1,200,105 2,303,311 $310,027 $14,100,667 6,003 27,038 38,831 3,243 34,530 1,058 11,523 5,067 6,564 308 75,533 720,276 2,043,330 $5,004,622 667,279 4,160,748 176,595 $3,928,102 918,659 1,109,740 1,899,703 $222,724 $11,919,054 5,967 26,898 38,607 3,223 34,331 1,053 11,923 5,122 6,915 394 73,409 657,618 1,929,988 $5,004,622 678,193 4,170,886 155,543 $4,104,102 886,713 1,046,754 2,170,635 $222,724 $11,919,054 -5.60% 2.68% 33.77% 10.95% 20.31% 37.91% 25.33% 25.67% 25.67% 16.04% -2.40% -55.87% 1.38% 21.25% 39.20% 18.30% 694 98,412 585 157,000 614 164,851 614 164,851 4.96% 5.00% 4.96% 5.00% 81 502,449 35,304 86 414,364 19,476 1,006 340,733 19,476 1,006 340,733 19,476 1069.77% -17.77% 1069.77% -17.77% 1,590 652,599 3,144 1,332,422 140 3,398 41 421,908 140 3,398 41 421,908 140 3,398 -98.70% -68.34% -98.70% -68.34% 334 2,699 76,108 138,409 $1,493,677 $13,412,731 460 4,275 79,808 117,243 $2,054,043 $13,973,097 821 2,482 86,289 146,057 $1,107,063 $15,207,730 34 $1,695 $85,502 146,057 $1,107,063 $15,207,730 78.48% -41.94% 8.12% 24.58% -46.10% 8.84% -92.61% -60.35% 7.13% 24.58% -46.10% 8.84% 66,504 User Fees Recovery from Prior Years 10,000 Transfers In/Out Recoveries Paid Resources from Other Accounts 4 Subtotal Other Resources Total Budgetary Resources FY 2023 Request % Change FY 2022 to FY 2023 FY 2022 to FY 2023 Request with Technical Adjustment Request Operating Plan1, 2 Offsetting Collections - Non Reimbursables Unobligated Balances from Prior Years FY 2022 FY 2023 Request with Technical Adjustment 10,500 10,500 AMOUNT 5.00% 1 FY 2021 Other Resources represent actuals. 2 FY 2021 Operating Plan includes an interappropriation transfer from Enforcement ($208 million) to Taxpayer Services ($32 million) and Operations Support ($176 million). 3 FY 2022 Annualized CR includes an interappropriation transfer of $208 million from Enforcement to Taxpayer Services. 4 FTE AMOUNT 5.00% Resources from Other Accounts reflect planned spending from Private Collection Agency retained earnings. Note: The new appropriated resources do not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L. 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), and the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2). Unobligated balances in FY 2022 and FY 2023 inlcude ARP funding. IRS - 4 Introduction The Internal Revenue Service (IRS) Fiscal Year (FY) 2023 budget request is $14.1 billion, $2.2 billion (18 percent) more than the FY 2022 Annualized Continuing Resolution (ACR) level of $11.9 billion, to administer the nation’s tax system fairly, collect more than $4 trillion in gross taxes to fund the government, and strengthen tax compliance. The Budget comprises initiatives to improve the taxpayer’s experience with the IRS, that will ultimately lead to increased voluntary tax compliance. The request also aims to ensure we stay current with the paper inventory and improve telephone and in-person service; facilitate better oversight of high income and corporate tax returns; and accelerate the development of digital tools to enable smarter communication with taxpayers. In addition, the Administration continues to support a multiyear investment in IRS enforcement to increase tax compliance and revenues that the President has previously proposed. An extensive enforcement program will generate and protect billions in additional revenue while reducing the tax gap. The IRS has an overall enforcement return on investment (ROI) of about $5 for every $1 invested compared to the IRS appropriated budget, excluding significant deterrence effects. Overall, this request proposes new and enhanced strategies for refining how the taxpayer interacts with the IRS by implementing strategies that put taxpayers first, bringing services to underserved communities and providing new and improved online tools for taxpayers to communicate with the IRS easily and quickly. An appropriate level of funding will allow the IRS to continue enhancing the taxpayer experience, narrowing the tax gap to ensure equitable administration of the tax code, protecting IRS systems and taxpayer data, and modernizing our information technology systems. Taxpayer services is only one component of funding required to serve taxpayers effectively. During the pandemic, for example, the Information Technology (IT) division provided the equipment necessary to allow thousands of IRS customer service representatives to telework, which enabled phone assistance to continue during a period of overwhelming demand while keeping our employees safe. The IRS dedicates itself to improving the taxpayer experience so that taxpayers and their representatives can understand and meet their tax obligations with minimal burden. The aim is to increase voluntary compliance by simplifying the tax filing, correction, and payment processes. To help achieve this, we will focus on improving education and outreach on taxpayer rights and obligations and enhancing service channels to meet taxpayer needs. In addition to improving the taxpayer experience, another priority is to ensure taxpayers comply with federal tax laws. To this effect we continue to develop innovative approaches to understanding, detecting, and resolving potential noncompliance to maintain taxpayer confidence in the tax system. The IRS expanded its taxpayer services through proactive outreach efforts to connect with underserved communities such as those with limited English proficiency (LEP), lower-income earners, military, veterans, retired and homeless, among other communities. We engaged hundreds of local and national groups, religious organizations, and numerous others to help contact underserved communities ensuring all eligible recipients could benefit from the Economic Impact Payments and Advance Child Tax Credit. We expanded communication options for LEP communities, such as releasing a Spanish version of Form 1040 and debuting Schedule LEP. In 2021, IRS translated 75-80 percent of the most popular pages on IRS.gov into seven languages. Expanding our offerings in multiple languages is just one way the IRS is working to enhance the taxpayer experience. Another way is by providing new virtual services and online tools to tax professionals so they can better assist their clients. Enhancing the experience of taxpayers and tax professionals is essential to maintaining a voluntary tax system. Ensuring fair enforcement of the tax laws is just as critical as the services we provide. The IRS makes it possible for the government to perform its vital functions, helping fund the great work of our nation on everything from education to defense. Though enforcement and taxpayer services efforts continue to expand, the IRS’s budget has decreased by approximately 15 percent in real terms since FY 2010. As a result of this decrease in funding, Taxpayer Services FTEs have not increased and Enforcement FTEs have declined by 30 percent from FY 2010 through FY 2021, while real Gross Domestic Product (GDP) IRS - 5 has increased by 29 percent (see Figure 1.1). Current staffing levels are close to 1974 levels (see figure 1.2 for the past 12year history). Reduced FTEs have crippled tax administration bandwidth and significantly diminished the IRS’s ability to: • • • • • • Deliver meaningful customer service, Maintain sufficient audit coverage of entities and individuals contributing the most to the tax gap, Collect taxes taxpayers acknowledge they owe but have not paid, Reduce the tax gap through a coordinated effort of both meaningful guidance and enforcement, Fund the government, and Modernize IT systems and facilities. Figure 1.1 IRS - 6 Figure 1.2 Note: FTE shown are funded through IRS annual appropriations as well as through funding provided in administrative provisions and supplemental legislation passed in addition to the annual appropriations. In FY 2020, this includes 2,144 FTE funded through the CARES Act. In FY 2021, this includes 2,933 FTE funded through supplemental appropriations within the Consolidated Appropriations Act, 2021 and the American Rescue Plan. IRS - 7 Reductions to enforcement staffing levels over the last decade factored pointedly into reduced total enforcement revenue collected (TERC) by around $95 billion. Figure 1.3 While a portion of the unpaid tax obligations that make up the tax gap result from a lack of knowledge or ambiguity and complexity in tax law, willful evasion is a significant contributing factor. The IRS could help remedy this with the funding of a multi-year enforcement initiative, that would include targeted investments in enforcement activities designed to increase revenue and lower the tax gap. The FY 2023 request and legislative proposals provide the IRS with a blueprint to address various facets of the tax gap. IRS - 8 Restructuring IRS Appropriations to Align Support Costs to Mission Costs With this budget, the Administration proposes a change to the appropriations language that would allow Taxpayer Services and Enforcement funding to be used for certain associated support costs that are currently reserved for Operations Support funding. Currently, Taxpayer Services and Enforcement funding only pays for an employee’s labor cost, not the cost to hire the employee or the IT equipment and space needed to make them productive. There are significant benefits to this change – future IRS budgets would reflect the full cost of Taxpayer Services and Enforcement, to include their necessary support costs. The changes would also prompt IRS Business Units to be more efficient with their support costs because they stand to directly benefit from savings. The IRS proposes using an internal reimbursable agreement process to carry out the proposed funding structure. In FY 2023, rental and Chief Financial Officer (CFO) costs will be reallocated from Operations Support to Taxpayer Services and Enforcement with more costs planned to move out of Operations Support in the future. A total of $710 million will be shifted from Operations Support to Taxpayer Services ($299 million) and Enforcement ($411 million) (see figure 1.4). For additional information, please see section D – Appropriations Language and Explanation of Changes includes a more detailed description and justification of this proposal. Figure 1.4 Appropriation Taxpayer Services Enforcement Operations Support Business Systems Modernization Grand Total Proposed Adjustments FY 2023 Request 3,385,723 5,861,649 4,543,268 310,027 $14,100,667 Rent 265,830 368,613 (634,443) CFO 33,040 42,051 (75,091) Adjustment Total 298,870 410,664 (709,534) - - - IRS - 9 Proposed Funding Levels 3,684,593 6,272,313 3,833,734 310,027 $14,100,667 B – Summary of the Request The IRS is responsible for administering the nation’s tax system and meeting the needs of America’s taxpayers by helping them understand their tax responsibilities and by enforcing the law with integrity and fairness. The IRS’s core operations include collection of individual and corporate taxes, examination of returns, taxpayer assistance, and oversight of tax-exempt organizations, as well as administering multiple refundable tax credits and other specialized programs. In FY 2021, the IRS collected more than $4 trillion in taxes (gross receipts before tax refunds) and collects nearly all the revenue that supports the federal government’s operations. With the U.S. tax base becoming more complex, one of the IRS’s key responsibilities is to make it easier for taxpayers to understand and meet their tax obligations. 269M Federal Tax Returns and Forms Processed $4.1T Collected in Gross Taxes $1,691 Average Individual Refund $75.0B Enforcement Revenue Collected The IRS’s FY 2023 budget request is composed of strategic investments that are aligned with the President’s Management Agenda, as well as with mission driven efforts that will perpetuate the trajectory of the agency to better serve the taxpayer – warrant an impartial tax system – and lessen the tax gap. The FY 2023 Budget requests a total program increase of $1.3 billion including: • • • • • • $320.2 million for continuing the Taxpayer First Act implementation activities; $469.3 million for continuing enforcement strategies that ensure a fair tax system; $389.1 million for implementing strategies to enhance taxpayer services; $78.1 million for building and enhancing IT systems that will improve taxpayer services; $39.5 million to enhance and increase IT operations; and $10.2 million to establish the Mississippi Delta hiring initiative designed to provide job opportunities for those who live in underdeveloped communities and develop a pipeline of talent. IRS - 10 FY 2023 Budget Request and Priorities The FY 2023 request is $14.1 billion, $2.2 billion or 18.3 percent more than the FY 2022 ACR of $11.9 billion. The Budget request includes, $12.8 billion in base resources and $1.3 billion in program increases to carry out the IRS mission, including: • • • • • • Putting Taxpayers First ($320 million), Ensure Fairness of the Tax System ($469 million), Enhance Taxpayer Service ($389 million), Integrated Modernization Business Plan ($78 million), Critical IT Operations ($39 million), and Focused Strategies for Reaching Underserved Communities ($10 million). Appropriation Account (Status Quo) Taxpayer Services Enforcement Operations Support Business Systems Modernization Total Appropriated Resources ($ in Millions) $3,385.7 5,861.6 4,543.3 310.0 $14,100.7 The following appropriation levels reflect the FY 2023 proposed appropriations language change, outlined in section D, that charges $710 million of support costs that were historically part of Operations Support to Taxpayer Services and Enforcement, for costs associated with rent and the Chief Financial Officer. When considering the proposed request, the appropriation levels for the FY 2023 budget are as follows: Appropriation Account (with Change) Taxpayer Services Enforcement Operations Support Business Systems Modernization Total Appropriated Resources IRS - 11 ($ in Millions) $3,684.6 6,272.3 3,833.7 310.0 $14,100.7 1.2 – Budget Adjustments Table Dollars in thousands Bureau: Internal Revenue Service Summary of Proposed FY 2023 Request FTE FY 2022 Annualized CR (ACR) 75,533 Amount $11,919,054 Changes to Base: Maintaining Current Levels (MCLs) $436,363 Pay Annualization (2.7% average pay raise) 62,546 Pay Raise (4.6% average pay raise) 321,837 Non-Pay 51,980 Base Adjustment 1,183 $438,882 1,183 438,882 Subtotal FY 2023 Changes to Base 1,183 $875,245 FY 2023 Current Services 76,716 $12,794,299 573 320,170 Taxpayer Experience Strategy 573 239,170 Ensure Fairness of the Tax System 2,513 469,253 Enhance Taxpayer Service 3,858 389,112 Integrated Modernization Business Plan 104 78,143 Critical IT Operations 36 39,521 Adjustment to Reach Current Operating Levels Program Changes: Program Increases Putting Taxpayers First 81,000 User Authentication Focused Strategies for Reaching Underserved Communities 7 10,169 Subtotal FY 2023 Program Increases 7,091 $1,306,368 Total FY 2023 Budget Request 83,807 $14,100,667 See footnotes in 1.1 -- Appropriations Detail Table This table does not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. IRS - 12 C – Base Adjustment and Program Changes Description Maintaining Current Levels…………………………….……………………………………………. +$436,363,000 / 0 FTE Pay Annualization (2.7%) +$62,546,000 / 0 FTE Funds are requested for annualization of the January 2022 2.7 percent average pay raise. Pay Raise (4.6%) +$321,837,000 / 0 FTE Funds are requested for a 4.6 percent average pay raise in January 2023. Non-Pay +$51,980,000 / 0 FTE Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, and equipment. Base Adjustment……………………………………………………………………….………+$438,882,000 / +1,183 FTE The FY 2023 base begins at the FY 2022 ACR level of $11.9 billion. In addition to $436 million to maintain current staffing levels, the base was adjusted by $439 million dollars to reach current operating funding levels. IRS - 13 Program Increases ……….…………………….……….……………………………………. +$1,306,368,000 / +7,091 FTE Collectively the following proposed FY 2023 investments total $390,808,000 with 1,832 FTE; the remaining $915,560,000 with 5,259 FTE is made up of the carried over FY 2022 investments – which are displayed in the Program Increase Table below and discussed in section 4.2. TAXPAYER SERVICES Bureau: Internal Revenue Service Summary of FY 2023 Request FY 2023 Program Increases: Putting Taxpayers First User Authentication $000 Taxpayer Experience Strategy Ensure Fairness of the Tax System Enhance Taxpayer Service Critical IT Operations ENFORCEMENT FTE $000 OPERATIONS SUPPORT FTE FY 2022 Program Increases: Putting Taxpayers First User Authentication Taxpayer Experience Strategy Ensure Fairness of the Tax System Enhance Taxpayer Service Integrated Modernization Business Plan Subtotal FY 2022 Program Increases Total FY 2023 Program Increases FTE BSM $000 83,575 54,000 29,575 138 15,461 55 42,082 86 138 15,461 55 42,082 156,000 1,510 Focused Strategies for Reaching Underserved Communities Subtotal FY 2023 Program Increases $000 TOTAL FTE $000 86 141,118 54,000 87,118 279 44,000 39,521 10,169 36 7 200,000 39,521 10,169 1,510 36 7 1,648 $15,461 55 $135,772 129 $390,808 1,832 40,036 27,000 54 38,870 97 100,146 143 179,052 27,000 294 13,036 54 38,870 370,857 97 2,493 143 20 148,167 2,348 100,146 98,396 40,945 152,052 469,253 189,112 294 2,513 2,348 $188,203 $427,778 2,402 4,050 $409,727 $425,188 2,590 2,645 $239,487 $375,259 163 292 FTE Positions 78,143 104 78,143 104 $78,143 $78,143 104 104 $915,560 $1,306,368 5,259 7,091 $000 User Authentication $54,000 Contract Services 54,000 Proactive Outreach and Education 102 204 $34,439 Revenue Agent 24 48 4,785 Attorney 13 26 2,316 Other 65 130 11,126 Contract Services Focused Strategies for Reaching Underserved Communities Other 16,212 61 122 $17,119 61 122 8,119 Contract Services 9,000 Taxpayer Experience Office 67 134 $15,484 Other Human Resources Support 67 134 15,484 Other Total 49 98 20,076 49 98 20,076 279 558 $141,118 Public Law 116-25, The Taxpayer First Act (TFA), requires the IRS to develop and implement a Taxpayer Experience Strategy (TXS) to improve the American taxpayer’s experience with the IRS. To fulfill the TXS requirement, the IRS’s Taxpayer First Act Office (TFAO), in partnership with key internal and external stakeholders and subject matter experts, identified certain areas of focus to inform the development and implementation of the TFA TXS. The FY 2023 funding concentrates on: • 279 $239,575 Putting Taxpayers First +$141,118,000 / +279 FTE Position Type/Other Costs FTE Expanding an application to protect taxpayers’ personally identifiable information, IRS - 14 • • • Expanding strategies that increase the IRS’s outreach and taxpayer education efforts, Developing strategies to reach underserved communities, and Providing human resources support for implementing the TFA. User Authentication +$54,000,000 / 0 FTE Section 2304 of the TFA requires the IRS to verify the identity of any individual opening an IRS online account before such individual can use online applications, including online tools for tax professionals. IRS will utilize the services of a thirdparty vendor, which charges for each new taxpayer who signs up for an IRS online account. Funding will provide authentication services for approximately 15 million estimated additional taxpayers who will sign up for online services such as applying for an identity protection PIN, obtaining a transcript, viewing account information, entering into an Online Payment Agreement, and functionalities of the Tax Pro Account application. Proactive Outreach and Education +$34,439,000 / +102 FTE The optimal taxpayer experience is for taxpayers to have all the information they need to comply with their tax obligations without expending any additional effort. To optimize the impact of an enhanced taxpayer experience, improved outreach, and a better understanding by taxpayers of their obligations is foundational. Building out a system of Proactive Outreach and Education will allow the IRS to use various channels, languages, and personalized messaging to reach taxpayers at the right time through the right format. Equipping taxpayers with this information proactively minimizes the likelihood of them having to contact the IRS, freeing up IRS resources to address other taxpayer needs. Educating taxpayers will increase confidence in the agency, enable them to meet tax obligations, and enable the IRS to better anticipate and respond to taxpayer needs. The following are highlights of what will be accomplished with funding: • • • • • Provide taxpayers with updates through their online accounts or push information to their mobile devices. This will include information on how to open online accounts and increasing usage of self-service digital options; Deliver information and education through additional social media platforms: - Capture data and analytics from platforms to understand demographic profiles; - Apply emerging technology that customizes messaging to the right taxpayer groups through their optimal platform at the right time; Issue simplified and improved notices; Analyze data to determine language translations needed for social media; and Use evidence-based approaches to design easy to understand plain language communications. Focused Strategies for Reaching Underserved Communities +$17,119,000 / +61 FTE The IRS leverages outreach relationships through two grant programs with local and national partners to educate and inform taxpayers about meeting their tax obligation. The Volunteer Income Tax Assistance (VITA) program provides underserved communities with free tax filing assistance and aids low-to-moderate-income taxpayers who cannot prepare their own tax returns, including the elderly, persons with disabilities, and those with limited English proficiency. The Tax Counseling for the Elderly Program (TCE) offers free tax counseling and assistance to elderly individuals (60 or older) in preparing their federal income tax returns. Additional funding will further expand IRS outreach and tax assistance services along with resources to address projected program staffing needs and support anticipated partner cultivation and growth of the two grant programs. IRS - 15 Taxpayer Experience Office (TXO) +$15,484,000 / +67 FTE In the Taxpayer First Act Report to Congress, the IRS identified as part of its key organizational structure the establishment of a new office designed to improve taxpayer experiences with the IRS. The Taxpayer Experience Office (TXO) drives strategic direction for improving the taxpayer experience across the IRS and helps ensure a consistent voice and experience across all taxpayer segments by developing agency-wide guidelines and expectations. Collaborating with peers across the entire agency, this office promotes an enterprise-level holistic view of the taxpayer experience with teams of experts in the areas of customer experience, research, behavioral analytics, human-centered design, and service delivery. The TXO provides IRS organizational units with information on industry trends and ways to apply customer service best practices within the framework of IRS operations and federal limitations. Human Resources Support +$20,076,000 / +49 FTE Funding for this initiative will continue the implementation of a service-wide training strategy, as required in section 2402 of the TFA. Key areas of this strategy will focus on organizational awareness, career paths, people first training, employee online forums, organizational liaisons, internal concierge service, and enhanced training technologies. Resources are also required to coordinate IRS-wide efforts for recruiting, hiring, onboarding, enabling, and training new employees to efficiently focus on large business, high-income and high-wealth taxpayers, partnerships, abusive crypto-currency transactions, and promoter-related examinations. Funding is requested to identify resource gaps, assess, and improve the way the IRS selects qualified individuals, and develop an integrated approach to hiring, recruitment, and training. Onboarding employees who have technical expertise in these areas will be critical. The IRS will also create a Center of Excellence for employee development that will be available to the Department as a shared service. Enhance Taxpayer Service +$200,000,000 / +1,510 FTE Position Type/Other Costs FTE Increase Telephone Level of Service Customer Service Rep Manager Positions $000 1,510 1,520 $200,000 1,500 1,500 172,800 10 20 Contractual Services/ IT 2,487 24,713 Total 1,510 1,520 $200,000 This investment will allow the IRS to increase the telephone level of service (LOS) to 85 percent assuming phone demand returns to pre-pandemic levels and the IRS can provide in-person services at pre-pandemic levels. This investment will build on the IRS’s efforts to improve telephone services for underserved communities such as those who are deaf or hard of hearing, LEP communities, and victims of tax related identity theft. During the 2021 filing season, the IRS’s level of service fell short of its targets because of the Coronavirus (COVID-19) pandemic and legislation aimed at providing relief that resulted in massively increased demand for the toll-free lines. Individual and Business taxpayer telephone demand increased by 456 percent and 244 percent, respectively during the 2021 filing season. In FY 2021, the number of taxpayers calling to schedule appointments at Taxpayer Assistance Centers (TACs) was 3.9 million above the same period in the prior year. In addition to expanding LOS for underserved communities, funding for this initiative will improve the way taxpayers interact with IRS by enhancing and expanding the range of modern, digital tools provided by IRS to deliver a service experience comparable to those available in the private sector. By empowering taxpayers to address certain needs without requiring live assistance, development of these tools is essential to IRS’s long-term success in satisfying taxpayer expectations and meeting the ongoing growth in demand for assistance. These resources will enable IRS to address strategic service needs, such as: IRS - 16 • • • • Expanding the features of individual Online Account to provide more personalized content and the ability to update and store information used for key activities like alerts, payments and estimating withholding; Developing a robust Business Online Account to provide business taxpayers (and their representatives) an integrated online account experience that enables them to securely manage and fulfill their federal tax obligations; Providing critical electronic payment capabilities in light of the planned decommissioning of Direct Pay and the Electronic Federal Tax Payments System (EFTPS); and Making improvements to IRS.gov to provide a modern and consistent experience that provides taxpayers the information they need in a timely, searchable, and mobile-adaptive environment. Critical Information Technology Operations +$39,521,000 / +36 FTE Position Type/Other Costs FTE IT Specialist Positions $000 36 72 7,031 36 72 $ 39,521 Contractual Services 32,490 Total The IRS continues to transform its technological landscape and has made progress on its modernization journey to provide taxpayers with a seamless customer experience, while empowering employees with the tools and systems needed to provide top quality services and enforce tax law. These successes have increased the need to sustain critical IT operations to maintain optimum network performance and functionality. The IRS continues to deploy and incorporate new, modernized tools for taxpayers, tax professionals, and employees. Taxpayer service improvements (additional digital services, real-time account information, etc.), enterprise efficiency advances (automation, artificial intelligence, machine learning, etc.) and new employee tools (case management, collaboration, learning platforms, etc.) all require additional bandwidth to sustain a high volume of users processing digitalized capabilities. Economic Development in Underserved Communities +$10,169,000 / +7 FTE Position Type/Other Costs FTE Analyst Positions $000 7 14 7,640 7 14 $ 10,169 Contractual Services 2,529 Total The IRS will cultivate new opportunities for adults and students in underserved communities by partnering with state labor and human services officials to identify talent and design training programs for adult candidates. Additionally, the IRS will develop a talent pipeline by partnering with colleges, universities (with a special focus on Historically Black Colleges and Universities and other minority servicing institutions) and high schools to design training programs to prepare participants for IRS careers. These partnerships will foster equitable economic growth, establish long-term federal employment options, and develop a continual stream of talent suited to further enhance the taxpayer experience and support the IRS mission. As a first step, the IRS plans to create a center in the Mississippi Delta Region, which currently has the highest rate of poverty in the United States, excluding the U.S. Territories. IRS - 17 1.3 – Object Classification (Schedule O) Obligations Dollars in thousands Internal Revenue Service Object Classification 11.1 Full-Time Permanent Positions FY 2021 Operating Plan FY 2022 Annualized CR FY 2023 Request 6,106,908 6,264,496 11.3 Other than Full-Time Permanent Positions 86,008 93,663 98,308 11.5 Other Personnel Compensation 301,867 336,242 372,976 11.8 Special Personal Services Payments 7,105,375 29,681 30,239 49,677 11.9 Personnel Compensation (Total) 6,524,464 6,724,640 7,626,336 12.1 Personnel Benefits 2,400,621 2,527,702 2,881,499 20,240 13,728 14,297 $8,945,325 $9,266,070 $10,522,132 141,505 13.0 Benefits to Former Personnel Total Personnel and Compensation Benefits 21.0 Travel 69,038 75,642 22.0 Transportation of Things 23,288 23,568 37,972 23.1 Rental Payments to GSA 579,736 609,019 634,381 23.2 Rent Payments to Others 23.3 Communications, Utilities, & Misc. 24.0 Printing & Reproduction 25.1 Advisory & Assistance Services 7,196 280 306 317,043 298,292 346,087 32,307 32,421 36,108 1,021,157 695,468 1,139,330 170,157 25.2 Other Services 89,204 91,615 25.3 Purchase of Goods & Services from Govt. Accounts 155,815 172,736 194,947 25.4 Operation & Maintenance of Facilities 199,042 202,780 223,733 25.6 Medical Care 15,097 17,724 44,877 25.7 Operation & Maintenance of Equipment 70,123 46,150 62,282 25.5 Research & Development Contracts 25.8 Subsistence & Support of Persons 26.0 Supplies and Materials 32,281 28,408 34,462 31.0 Equipment 269,122 249,320 362,726 32.0 Land and Structures 32,645 45,987 76,858 41.0 Grants, Subsidies 54,000 54,000 63,000 42.0 Insurance Claims & Indemnities 2,135 2,074 2,115 33.0 Investments & Loans 43.0 Interest and Dividends 44.0 Refunds 91.0 Unvouchered 4,500 7,500 7,690 Total Non-Personnel $2,973,729 $2,652,984 $3,578,535 New Appropriated Resources $11,919,054 $11,919,054 $14,100,667 Appropriations: Taxpayer Services 2,587,606 2,763,606 3,385,723 Enforcement 5,004,622 5,004,622 5,861,649 Operations Support 4,104,102 3,928,102 4,543,268 Business Systems Modernization 222,724 222,724 310,027 $11,919,054 $11,919,054 $14,100,667 73,409 75,533 83,807 New Appropriated Resources FTE See footnotes in 1.1 -- Appropriations Detail Table Note 1: This table does not include the proposed technical adjustment that would move certain support activities from Operations Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operations Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. Note 2: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L. 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2) IRS - 18 D – Appropriations Language and Explanation of Changes Appropriations Language Explanation of Changes TAXPAYER SERVICES For necessary expenses of the Internal Revenue Service to provide taxpayer services, including pre-filing assistance and education, filing and account services, taxpayer advocacy services, associated support costs, and other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $3,684,593,000; of which not to exceed $100,000,000 shall remain available until September 30, 2024; of which not less than $11,000,000 shall be for the Tax Counseling for the Elderly Program; of which not less than $26,000,000 shall be available for low-income taxpayer clinic grants, including grants to individual clinics of up to $200,000; of which not less than $30,000,000, to remain available until September 30, 2024, shall be available for the Community Volunteer Income Tax Assistance Matching Grants Program for tax return preparation assistance; and of which not less than $235,000,000 shall be available for operating expenses of the Taxpayer Advocate Service: Provided, That of the amounts made available for the Taxpayer Advocate Service, not less than $5,500,000 shall be for identity theft and refund fraud casework. Adding “associated support costs” would allow the IRS to reallocate service-related support costs from Operations Support to Taxpayer Services, to ensure that Taxpayer Services reflects the full cost of delivering mission critical activities. See the following section titled Restructuring IRS Appropriations to Align Support Costs to Mission Costs, on page IRS-25, for more information regarding this proposal. Allowing $100,000,000 to remain available until September 30, 2024, in the Taxpayer Services account provides IRS with needed relief in the event that IRS is not successful in hiring thousands of employees in extremely tight labor markets where IRS has campus facilities. Note.—A full-year 2022 appropriation for this account was not enacted at the time the budget was prepared; therefore, the budget assumes this account is operating under the Continuing Appropriations Act, 2022 (Division A of P.L. 117–43, as amended). The amounts included for 2022 reflect the annualized level provided by the continuing resolution. ENFORCEMENT For necessary expenses for tax enforcement activities of the Internal Revenue Service to determine and collect owed taxes, to provide legal and litigation support, to conduct criminal investigations, to enforce criminal statutes related to violations of internal revenue laws and other financial crimes, to purchase and hire passenger motor vehicles (31 U.S.C. 1343(b)), associated support costs, and to provide Adding “associated support costs” would allow the IRS to reallocate service-related support costs from Operations Support to Enforcement, to ensure that Enforcement reflects the full cost of delivering mission critical activities. See the following section titled Restructuring IRS Appropriations to Align Support Costs to Mission Costs, on page IRS-25, for more information regarding this proposal. IRS - 19 other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $6,272,313,000; of which not to exceed $250,000,000 shall remain available until September 30, 2024; of which not less than $60,257,000 shall be for the Interagency Crime and Drug Enforcement program; and of which not to exceed $21,000,000 shall be for investigative technology for the Criminal Investigation Division: Provided, That the amount made available for investigative technology for the Criminal Investigation Division shall be in addition to amounts made available for the Criminal Investigation Division under the "Operations Support" heading. Note.—A full-year 2022 appropriation for this account was not enacted at the time the budget was prepared; therefore, the budget assumes this account is operating under the Continuing Appropriations Act, 2022 (Division A of P.L. 117–43, as amended). The amounts included for 2022 reflect the annualized level provided by the continuing resolution. OPERATIONS SUPPORT For necessary expenses to operate the Internal Revenue Service, including headquarters; the hire of passenger motor vehicles (31 U.S.C. 1343(b)); the operations of the Internal Revenue Service Oversight Board; and other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner; $3,833,734,000; of which not to exceed $275,000,000 shall remain available until September 30, 2024; of which not to exceed $10,000,000 shall remain available until expended for acquisition of equipment and construction, repair and renovation of facilities; of which not to exceed $1,000,000 shall remain available until September 30, 2025, for research; and of which not to exceed $20,000 shall be for official reception and representation expenses: Provided, That not later than 30 days after the end of each quarter, the Internal Revenue Service shall submit a report to the Committees on Appropriations of the House of Representatives and the Senate and the Comptroller General of the United States detailing major information technology investments in the Internal Revenue Service Integrated Modernization Business Plan portfolio, including detailed, plain language summaries on the status of plans, costs, and results; prior results and actual The administration proposes editing the following verbiage from the Operations Support language: For necessary expenses to operate the Internal Revenue Service, including; headquarters This change would allow the IRS to reallocate servicerelated support costs from Operations Support to the mission-specific appropriations, Taxpayer Services or Enforcement, to reflect the full cost of delivering mission critical activities in those taxpayer-facing accounts. See the following section titled Restructuring IRS Appropriations to Align Support Costs to Mission Costs, on page IRS-25, for more information regarding this proposal. The administration proposes to remove the following statement [from the IRS FY 2023 Operations Support language]: “of which not less than $10,000,000, to remain available until expended, shall be available for establishment of an application through which entities registering and renewing registrations in the System for Award Management may request an authenticated electronic certification stating that the entity does or does not have a seriously delinquent tax debt,”. With the FY 2022 enacted budget, the IRS has received $30,000,000 of IRS - 20 expenditures of the prior quarter; upcoming deliverables and costs for the fiscal year; risks and mitigation strategies associated with ongoing work; reasons for any cost or schedule variances; and total expenditures by fiscal year: Provided further, That the Internal Revenue Service shall include, in its budget justification for fiscal year 2024, a summary of cost and schedule performance information for its major information technology systems. no year funds earmarked for this effort from since FY 2020. The IRS is committed to completing this project and will use those earmarked funds to complete it. If funding needs arise beyond those available funds, the IRS would use current year funds to complete the project. Note.—A full-year 2022 appropriation for this account was not enacted at the time the budget was prepared; therefore, the budget assumes this account is operating under the Continuing Appropriations Act, 2022 (Division A of P.L. 117–43, as amended). The amounts included for 2022 reflect the annualized level provided by the continuing resolution. BUSINESS SYSTEMS MODERNIZATION For necessary expenses of the Internal Revenue Service's business systems modernization program, $310,027,000, to remain available until September 30, 2025, for the capital asset acquisition of information technology systems, including management and related contractual costs of said acquisitions, including related Internal Revenue Service labor costs, and contractual costs associated with operations authorized by 5 U.S.C. 3109: Provided, That not later than 30 days after the end of each quarter, the Internal Revenue Service shall submit a report to the Committees on Appropriations of the House of Representatives and the Senate and the Comptroller General of the United States detailing major information technology investments in the Internal Revenue Service Integrated Modernization Business Plan portfolio, including detailed, plain language summaries on the status of plans, costs, and results; prior results and actual expenditures of the prior quarter; upcoming deliverables and costs for the fiscal year; risks and mitigation strategies associated with ongoing work; reasons for any cost or schedule variances; and total expenditures by fiscal year. Note.—A full-year 2022 appropriation for this account was not enacted at the time the budget was prepared; therefore, the budget assumes this account is operating under the Continuing Appropriations Act, 2022 (Division A of P.L. 117–43, as amended). The amounts included for 2022 IRS - 21 reflect the annualized level provided by the continuing resolution. ADMINISTRATIVE PROVISIONS-INTERNAL REVENUE SERVICE (INCLUDING TRANSFER OF FUNDS) SEC. 101. Not to exceed 4 percent of the appropriation made available in this Act to the Internal Revenue Service under the "Enforcement" heading, and not to exceed 5 percent of any other appropriation made available in this Act to the Internal Revenue Service, may be transferred to any other Internal Revenue Service appropriation upon advance notice to the Committees on Appropriations of the House of Representatives and the Senate: Provided, That an additional 2 percent of the appropriation made available in this Act to the Internal Revenue Service under the "Enforcement" heading may be transferred to the appropriation made available in this Act to the Internal Revenue Service under the "Taxpayer Services" heading upon advance notice to the Committees on Appropriations of the House of Representatives and the Senate. This change will allow IRS to transfer up to 6 percent into the Taxpayer Services account from Enforcement in case this flexibility is still needed in FY 2023 to address inventory issues, while still retaining the existing 4 percent transfer authority out of Enforcement to the Operations Support or BSM accounts, and the existing 5 percent transfer authority out of any of the other accounts. SEC. 102. The Internal Revenue Service shall maintain an employee training program, which shall include the following topics: taxpayers' rights, dealing courteously with taxpayers, cross-cultural relations, ethics, and the impartial application of tax law. SEC. 103. The Internal Revenue Service shall institute and enforce policies and procedures that will safeguard the confidentiality of taxpayer information and protect taxpayers against identity theft. SEC. 104. Funds made available by this or any other Act to the Internal Revenue Service shall be available for improved facilities and increased staffing to provide sufficient and effective 1–800 help line service for taxpayers. The Commissioner shall continue to make improvements to the Internal Revenue Service 1–800 help line service a priority and allocate resources necessary to enhance the response time to taxpayer communications, particularly with regard to victims of tax-related crimes. SEC. 105. The Internal Revenue Service shall issue a notice of confirmation of any address change relating to an IRS - 22 employer making employment tax payments, and such notice shall be sent to both the employer's former and new address and an officer or employee of the Internal Revenue Service shall give special consideration to an offer-incompromise from a taxpayer who has been the victim of fraud by a third-party payroll tax preparer. SEC. 106. None of the funds made available under this Act may be used by the Internal Revenue Service to target citizens of the United States for exercising any right guaranteed under the First Amendment to the Constitution of the United States. SEC. 107. None of the funds made available in this Act may be used by the Internal Revenue Service to target groups for regulatory scrutiny based on their ideological beliefs. SEC. 108. None of funds made available by this Act to the Internal Revenue Service shall be obligated or expended on conferences that do not adhere to the procedures, verification processes, documentation requirements, and policies issued by the Chief Financial Officer, Human Capital Office, and Agency-Wide Shared Services as a result of the recommendations in the report published on May 31, 2013, by the Treasury Inspector General for Tax Administration entitled "Review of the August 2010 Small Business/Self-Employed Division's Conference in Anaheim, California" (Reference Number 2013–10–037). SEC. 109. None of the funds made available in this Act to the Internal Revenue Service may be obligated or expended— (1) to make a payment to any employee under a bonus, award, or recognition program; or (2) under any hiring or personnel selection process with respect to rehiring a former employee; unless such program or process takes into account the conduct and Federal tax compliance of such employee or former employee. SEC. 110. None of the funds made available by this Act may be used in contravention of section 6103 of the Internal Revenue Code of 1986 (relating to confidentiality and disclosure of returns and return information). SEC. 111. Notwithstanding any Congressional notification requirements for a reprogramming of funds in this Act, IRS - 23 funds provided in this Act for the Internal Revenue Service shall be available for obligation and expenditure through a reprogramming of funds that augments or reduces existing programs, projects, or activities by up to $10,000,000 without prior Congressional notification of such action. IRS - 24 Structural Changes to IRS Appropriations to Improve Mission Delivery and Transparency With this Budget, the Administration proposes structural changes to IRS appropriations that would align the IRS funding for support activities with mission delivery activities. The current appropriations language segments many support activities into Operations Support. The Operation Support appropriation language specifies it must be used to fund support costs such as: … rent payments; facilities services; printing; postage; physical security; headquarters and other IRS-wide administration activities; research and statistics of income; telecommunications; information technology development, enhancement, operations, maintenance, and security … By separating funding for these activities from the mission activities that they support, this structure obscures the full cost of delivering the IRS mission. The administration proposes a multi-year process to shift activities from Operations Support into the mission appropriations, so the IRS budget better reflects the full cost of its mission programs. This shift in resources would improve full-cost transparency, mission delivery and long-term accountability. Challenges The Operations Support account currently funds multiple activities that directly contribute to and ensure that IRS personnel funded in Enforcement and Taxpayer Service accounts can execute their missions. For example, while revenue agent salaries are funded in the Enforcement account, the facilities (and the resulting rent and physical security) and the computer equipment and systems that the agents use to conduct their work are funded in the Operations Support account. The Program Integrity Allocation Adjustment (PIAA), like similar proposals included in previous budgets provides an illustrative example – its mission is solely focused on tax law enforcement, but a third of its funds were needed in the Operations Support appropriation. Aligning these support costs in the mission appropriation would better reflect the full cost of those mission programs – providing improved transparency. The effect of the current language as written is that Taxpayer Services and Enforcement fund mostly salaries and benefits, while Operations Support funds most other costs. This distortion is apparent when comparing the relative amounts of IRS labor and nonlabor in Taxpayer Services and Enforcement (91 percent labor) to Operations Support (45 percent labor) in this budget. Figure 1.5 IRS - 25 The separation between IRS labor and its associated, often non-labor, support complicates efficiency tradeoffs and creates prioritization challenges. For example, the IRS must prioritize Operations Support funding for IT investment requests coming from different business units. If the funding of these activities came from the business units’ appropriations, which is a long-term goal of this project, they could potentially contribute from their own funding – allowing business units to invest in IT to deliver on their mission. The reimagined IRS under the Taxpayer First Act calls for modernization and technology enhancements to advance the IRS into the 21st century with more user-friendly electronic interactions, secure digital accounts, and self-service options. This mandate continues the growth trend of IT, currently funded exclusively by Operations Support and Business Systems Modernization (BSM), even as IT becomes increasingly intertwined with IRS operations. The costs of maintaining aged information systems, complying with cybersecurity mandates, and implementing other mandates, drive further growth. Orienting funding by mission appropriation would also improve business unit leaders’ ability to allocate resources to their highest priority needs. It would improve the alignment between performance metrics for the units and their funding. By making business unit leaders directly responsible for the funding, and by extension the performance of their programs, these changes make leaders more accountable to Congress and the American public. Remedy To address this problem, the administration proposes changes to its appropriations language and an attendant shift between appropriations. The specified appropriation language changes would allow IRS to fund certain support activities from Taxpayer Services and Enforcement appropriations using cost pools. Cost pools would be created using IRS internal reimbursable arrangements. For FY 2023, the Administration proposes to implement the capability by funding Rent and CFO Services from the mission appropriations. We expect the change would result in more efficient use of IRS resources and constitute progress towards implementing cost pools for additional support activities, including IT. Proposed Changes Budget Activity Pre-Filing Taxpayer Assistance & Education Filing & Account Services Taxpayer Services Investigations Exam & Collections Regulatory Enforcement Infrastructure Shared Services & Support Information Services Operations Support Business Systems Modernization Business Systems Modernization Grand Total FY 2023 Request 804 2,582 3,386 785 4,883 193 5,861 1,040 1,200 2,304 4,544 310 310 14,101 Rent 56 210 266 50 308 11 369 (635) (635) - CFO 7 26 33 4 37 1 42 (75) (75) - Proposed Funding 867 2,818 3,685 839 5,228 205 6,272 405 1,125 2,304 3,834 310 310 14,101 Implementing cost pools for IT, a future goal for this effort, would allow IRS leaders to make tradeoff decisions to fund key technology enhancements. Such enhancements would allow the IRS to accomplish its mission to provide American taxpayers with top quality service in understanding and meeting their tax responsibilities and to apply the tax law with integrity and fairness for all. For example, an Enforcement activity could deploy IT robotic process automation to reduce its time to close a IRS - 26 case by providing its own enforcement funds to IT to fund the automation effort. Currently, such an innovation would have to be prioritized with all other Operation Support costs. Incremental Transition The IRS plans and proposes to incrementally transition from its current structure to the new, full-cost focused mission appropriations and a significantly reduced Operations Support appropriation over the next three years. This gradual transition would provide time to test associated business processes, such as assigning or allocating shared costs from multiple business units to cost pools and implement updates to the accounting system before requesting additional funding shifts from Operations Support. Activities are currently expected to include: • • • • • • • • • Information Technology, Communications, Facilities Management, Human Capital Organization, Enterprise Change and Innovation, Procurement, Chief Financial Officer, Printing and Postage, and Other shared services. While much is expected to be shifted, the IRS requests to retain the Operations Support appropriation to fund certain support activities, such as the National Headquarters costs incurred for IRS leadership. With the noted appropriation changes, the IRS is targeting to shift the full costs of the missions to their respective appropriation by FY 2025. To accomplish this, the IRS plans to shift more functions and funds from the Operations Support appropriation to the Taxpayer Service and Enforcement appropriations going forward. IRS - 27 E – Legislative Proposals For information on the FY 2023 revenue legislative proposals, please follow this link: https://home.treasury.gov/policyissues/tax-policy/revenue-proposals Reduce Paperwork Burden by Permanently Authorizing Current Home to Work Transportation for the IRS Commissioner The IRS requests that the IRS Commissioner position be permanently added to 31 U.S.C. § 1344(b)(6) as one of the government officials authorized home-to-work transportation. The IRS Criminal Investigations unit completed an extensive assessment of the Commissioner’s threat environment and has classified the threat status as high. PROPOSAL: Amend Title 31 U.S.C. § 1344(b)(6) to include “the Commissioner of Internal Revenue” as a federal executive with authorization for passenger carrier transportation between residence and place of employment. REASONS FOR CHANGE: As head of one of the most controversial organizations in the Federal government, the Commissioner is the “face of the IRS” and a frequent fixture in national media. Historically, Commissioners average multiple formidable threats per year directed at them and their family members, including threats of assassination. The internet has allowed anyone with a web browser to access personal information of government officials, including photos and home addresses. Instances of individuals phoning, mailing, or visiting a Commissioner’s residence, including the current Commissioner, are common and well documented. Dignitary protection experts have long recognized the vulnerability of protected individuals who are engaged in predictable activities, such as commuting to/from the workplace and for many years IRS Criminal Investigation Division (CI) has consistently provided transportation for the IRS Commissioner from Home to Work under recurring 90-day authorizations. The administrative burden of compiling, organizing, and summarizing the information required for the recurring 90-day Home to Work authorizations is significant, requiring executive approval from IRS’s Chief of Criminal Investigations, Treasury’s Assistant Secretary for Management, and the Secretary of the Treasury. Fund the Federal Payment Levy Program via Collections (proposal also included in the Fiscal Service CJ) Estimated costs: $220 million in Fiscal Service costs to operate the Tax Levy Program in the Treasury Offset Program over 10 years. Fiscal Service is currently being reimbursed for this cost from IRS appropriated funding. This proposal improves the way the Fiscal Service collects its reimbursement from IRS to cover Fiscal Service’s costs in developing and operating the Federal Payment Levy Program (FPLP), which utilizes the Treasury Offset Program to process levies of federal payments to collect delinquent tax debts. Under the Economy Act, the IRS pays fees to Fiscal Service from the IRS annual discretionary appropriation. This proposal authorizes Fiscal Service to recover its costs from levy collections, rather than from IRS’s direct appropriation, which reduces administrative and overhead costs for both Fiscal Service and IRS. It would also allow IRS to re-direct the use of appropriated dollars that are currently needed to fund FPLP to other initiatives that will aid in the collection of delinquent tax debt. IRS - 28 Section II – Budget and Performance Plan A – Strategic Alignment The IRS is developing its FY 2022 – 2026 Strategic Plan to serve as a roadmap to help guide its programs and operations. IRS’s strategic priorities align with Treasury’s FY 2022 – 2026 strategic priorities to improve the taxpayer experience, enforce the tax law fairly and efficiently, foster a diverse workforce and transform our operations to be more sustainable and efficient. The IRS Strategic Plan will be published by Spring 2022. This budget supports the following Treasury Strategic Objectives for FY 2022 – FY 2026 and Agency Priority Goals for FY 2022 - FY 2023 for all appropriations: IRS co-leads the following objective with the Department Office of Tax Policy: Goal 1: Promote Equitable Economic Growth and Recovery • Objective 1.1 Tax Administration and Policy IRS supports the following eight objectives: Goal 2: Enhance National Security • • Objective 2.1 Cyber Resiliency of Financial Systems and Institutions Objective 2.4 Transparency in the Financial System Goal 3: Protect Financial Stability and Resiliency • Objective 3.3 Financial Innovation Goal 4: Combat Climate Change • Objective 4.4 Sustainable Treasury Operations Goal 5: Modernize Treasury Operations • • • • Objective 5.1 Recruit and Retain Diverse and Inclusive Workforce Objective 5.2 Future Work Routines Objective 5.3 Better Use of Data Objective 5.4 Customer Experience Practices Agency Priority Goals (APGs): IRS supports the Bureau of Fiscal Service’s Improving the Payment Experience APGs for FY 2022 – FY 2023. Bureau of Fiscal Service Improving the Payment Experience: Create a modern, seamless, inclusive, and secure Federal payment experience for the public that meets customer needs while reducing costs, expanding financial inclusion, and improving climate sustainability of Treasury’s operations. By September 30, 2023, Treasury will: • Increase the electronic payment rate for Treasury-disbursed payments to 96.56% by the end of FY 2023, compared with 96.18% in FY 2021; and − Achieving this increased electronic payment rate would lead to an estimated reduction of 4.8 million checks. (Assuming FY 21 payment volume data, which excludes Economic Impact Payments and Advance Child Tax Credit payments) Note: Future legislation related to payment processing may impact these target measures. IRS - 29 • Increase the electronic payment rate for IRS individual tax refunds to 81.00% by the end of FY 2023, compared with 80.34% in FY 2021. Accomplishments and Priorities IRS’s FY 2021 accomplishments include: • • • • Launched the Child Tax Credit Update Portal in support of the American Rescue Plan; Identity Protection PIN program was expanded to all 50 states, the District of Columbia, Puerto Rico, Virgin Islands, and military personnel living overseas in January 2021, fully implementing the requirements of the Taxpayer First Act Provision Section 2005 three-years earlier than requested; Registered over 169,000 taxpayers with Secure Access Virtual Assistant, resulting in a savings of over $11 million; and, Expanded electronic processing of amended returns to include a direct deposit of refunds in support of the of reducing paper checks APG. FY 2023 IRS Initiatives The following are IRS’s FY 2023 strategic priorities with initiatives to support Treasury’s goals and objectives. IRS rolled over FY 2022 initiatives Putting Taxpayers First, Ensure Fairness of the Tax System, and Integrated Modernization Business Plan. • • • • • • Putting Taxpayers First initiative will support the following Treasury Strategic Objectives: 1.1 - Tax Administration and Policy, 2.1 - Cyber Resiliency of Financial Systems and Institutions, 3.3 - Financial Innovation, 5.1 - Recruit and Retain a Diverse and Inclusive Workforce, 5.3 - Better Use of Data, and 5.4 - Customer Experience Practices. Ensure Fairness of the Tax System initiative will support Treasury Strategic Objectives: 1.1 - Tax Administration and Policy and 2.4 - Transparency in the Financial System. Enhance Taxpayer Experience initiative will support Treasury Strategic Objectives: 1.1 - Tax Administration and Policy and 5.4 - Customer Experience Practices. Integrated Modernization Business Plan initiative will support Treasury Strategic Objectives: 1.1- Tax Administration and Policy, 3.3 - Financial Innovation, 5.2 - Future Work Routines, 5.3 - Better Use of Data, and 5.4 - Customer Experience Practices. Augment IT Operations initiative will support Treasury Strategic Objective: 1.1 - Tax Administration and Policy. Economic Development in Underserved Communities initiative will support Treasury Strategic Objective: 1.1 - Tax Administration and Policy and 5.1 - Recruit and Retain a Diverse and Inclusive Workforce. IRS - 30 Taxpayer Services Appropriation Description The Taxpayer Services appropriation provides funding for taxpayer service activities and programs. This includes printing forms and publications, processing tax returns and related documents, offering filing and account services, taxpayer assistance, providing taxpayer advocacy services, and supporting activities. The Taxpayer Services budget request for FY 2023 is $3,385,723,000 in direct appropriations and 32,865 FTE, excluding the proposed technical adjustment. This amount is an increase of $622,117,000 or 22.51 percent, and an increase of 4,875 FTE, or 17.42 percent from the FY 2022 ACR of $2,763,606,000 and 27,990 FTE. 2.1 – Budget Adjustments Table Dollars in thousands Taxpayer Services Summary of Proposed FY 2023 Request FTE FY 2022 Annualized CR (ACR) 27,990 Amount $2,763,606 Changes to Base: Maintaining Current Levels (MCLs) $108,631 Pay Annualization (2.7% average pay raise) 17,105 Pay Raise (4.6% average pay raise) 88,016 Non-Pay 3,510 Base Adjustment 825 Adjustment to Reach Current Operating Levels $90,285 825 90,285 Subtotal FY 2023 Changes to Base 825 $198,916 FY 2023 Current Services 28,815 $2,962,522 192 119,034 Program Changes: Program Increases Putting Taxpayers First User Authentication 81,000 Taxpayer Experience Strategy 192 38,034 Enhance Taxpayer Service 3,858 304,167 Subtotal FY 2023 Program Increases 4,050 $423,201 Total FY 2023 Budget Request 32,865 $3,385,723 See footnotes in 1.1 -- Appropriations Detail Table This table does not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. IRS - 31 2.2 – Object Classification Obligations Dollars in thousands Taxpayer Services Object Classification 11.1 Full-Time Permanent Positions FY 2021 Operating Plan FY 2022 Annualized CR FY 2023 Request 1,599,164 1,668,445 1,991,237 11.3 Other than Full-Time Permanent Positions 53,855 67,240 70,141 11.5 Other Personnel Compensation 122,409 149,810 166,410 9,750 10,154 11.8 Special Personal Services Payments 11.9 Personnel Compensation (Total) 1,775,428 1,895,245 2,237,942 12.1 Personnel Benefits 576,632 625,520 762,029 13.0 Benefits to Former Personnel 19,887 13,334 13,887 $2,371,947 $2,534,099 $3,013,858 21.0 Travel 5,162 5,966 10,668 22.0 Transportation of Things 671 599 611 23.3 Communications, Utilities, & Misc. 1,290 1,258 1,285 24.0 Printing & Reproduction 9,791 9,783 10,437 25.1 Advisory & Assistance Services 45,729 55,802 139,505 25.2 Other Services 25,190 27,032 49,534 25.3 Purchase of Goods & Services from Govt. Accounts 68,677 70,401 76,079 51 51 52 4,209 3,872 4,461 Total Personnel and Compensation Benefits 23.1 Rental Payments to GSA 25.7 Operation & Maintenance of Equipment 26.0 Supplies and Materials 31.0 Equipment 400 254 374 54,000 54,000 63,000 489 489 498 Total Non-Personnel $215,659 $229,507 $371,864 New Appropriated Resources $2,587,606 $2,763,606 $3,385,723 Pre-filing Taxpayer Assistance & Education 657,618 720,276 803,873 Filing & Account Services 1,929,988 2,043,330 2,581,850 New Appropriated Resources $2,587,606 $2,763,606 $3,385,723 25,989 27,990 32,865 41.0 Grants, Subsidies 42.0 Insurance Claims & Indemnities Budget Activities: FTE See footnotes in 1.1 -- Appropriations Detail Table Note 1: This table does not include the proposed technical adjustment that would move certain support activities from Operations Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operations Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. Note 2: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L. 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2) IRS - 32 2.3 – Appropriation Detail Table Dollars in thousands Taxpayer Services Appropriated Resources FY 2021 Operating Plan FTE FY 2022 Annualized CR AMOUNT FTE FY 2023 Request AMOUNT FTE AMOUNT Change % Change FY 2022 to FY 2023 Request FY 2022 to FY 2023 Request FTE FTE AMOUNT AMOUNT New Appropriated Resources: Pre-Filing Taxpayer Assistance and Education 4,514 657,618 5,536 720,276 5,967 803,873 431 83,597 7.79% 11.61% Filing and Account Services 21,475 1,929,988 22,454 2,043,330 26,898 2,581,850 4,444 538,520 19.79% 26.36% Subtotal New Appropriated Resources 25,989 $2,587,606 27,990 $2,763,606 32,865 $3,385,723 4,875 $622,117 17.42% 22.51% 514 39,449 429 45,000 450 47,250 21 2,250 4.90% 5.00% 71 78,900 991 78,900 920 Other Resources: Reimbursables Offsetting Collections - Non Reimbursables User Fees 6,281 71 Recovery from Prior Years Unobligated Balances from Prior Years 64,900 21,760 877 190,789 1 50 7,268 3,100 1295.77% 7,268 276,216 (3,100) (276,216) -100.00% -100.00% Transfers In/Out Recoveries Paid Resources from Other Accounts 4 4 Subtotal Other Resources 1,463 $323,229 3,600 $407,388 1,441 $133,422 (2,159) ($273,966) -59.97% -67.25% Total Budgetary Resources 27,452 $2,910,835 31,590 $3,170,994 34,306 $3,519,145 2,716 $348,151 8.60% 10.98% See footnotes in 1.1--Appropriations Detail Table The new appropriated resources in this table do not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.6 million. 2A – Pre-Filing Taxpayer Assistance and Education ($803,873,000 in direct appropriations and an estimated $201,000 in reimbursable programs): This budget activity funds direct labor and some non-labor expenses to assist with tax return preparation, including tax law interpretation, publication, production, and advocate services. The program activities include: • • • • • • • Pre-Filing Services Management supports headquarters staffing and support for Taxpayer Advocate Service and Customer Assistance Relationship and Education (CARE) program activities. CARE provides pre-filing taxpayer assistance and education. Taxpayer Communication and Education research customer needs; develops and manages educational programs; establishes partnerships with stakeholder groups; and disseminates tax information to taxpayers and the public through a variety of media, including publications and mailings, websites, broadcasting, and advertising. Media and Publications develops and produces notices, forms, and publications for printed and electronic tax materials, and provides media production services to taxpayers. Taxpayer Advocacy provides advocate services to taxpayers by identifying the underlying causes of taxpayer problems and participating in the development of systematic and/or procedural remedies. Account Management and Assistance – Field Assistance provides face-to-face assistance, education, and compliance services to taxpayers. It includes return preparation, answering tax questions, resolving account and notice inquiries, and supplying forms and publications to taxpayers. Taxpayer Advocate Case Processing provides advocate services to taxpayers to resolve taxpayer problems through prompt identification, referral, and settlement. Wage and Investment (W&I) HQ Management and Administration provides staffing, training, and direct support for W&I management activities of strategic planning, communications and liaison, finance, human resources, equity, diversity and inclusion, business modernization, and embedded training. IRS - 33 • • Taxpayer Services Research provides resources to support taxpayer services by conducting taxpayer behavioral studies, data analysis, and uses advanced analytics to deliver results and conclusions to inform business decisions to improve IRS products and services. National Distribution Center processes orders for IRS forms and publications received from individual taxpayers, tax practitioners, and IRS tax return preparation partners. Description of FY 2021 Performance – Pre-Filing and Taxpayer Assistance In FY 2021, the Timeliness of Critical Individual Filing Season (CIFS) Tax Products to the Public (i.e., tax forms, schedules, instructions, and publications) was 92 percent (81 out of 88 products delivered timely), exceeding the FY 2021 target of 85 percent. This accomplishment was partially due to the enactment of the P.L. 116-260, Consolidated Appropriations Act of 2021, which determined the February 12 filing season start date. The legislation provided more time to meet the annual goal. Additional factors that contributed to exceeding this year’s target and are proven models for future success include prioritizing work on the release of critical products; planning for legislative changes to quickly re-prioritize work targeted to critical products impacted by the law; granting of overtime, credit, and compensatory time during workdays, weekends, and holidays; and workload planning and monitoring by management as well as the efforts of our employees. The IRS expects to achieve a target of 89 percent for FY 2022 and FY 2023. In FY 2021, the IRS Timeliness of Critical Tax TE/GE and Business (CTB) Filing Season Tax products to the Public was 92.9 percent, exceeding the target of 85 percent. These results were achieved due to the enactment of the P.L. 116-260, Consolidated Appropriations Act of 2021, which determined the February 12 filing season start date. The legislation provided more time to meet the annual goal. Additional factors that contributed to exceeding this year’s target and are proven models for future success include prioritizing work on the release of critical products; planning for legislative changes to quickly reprioritize work targeted to critical products impacted by the law; granting of overtime, credit, and compensatory time during workdays, weekends, and holidays; and workload planning and monitoring by management as well as the efforts of our employees. The IRS expects to achieve a target of 89 percent for FY 2022 and FY 2023. Figure 2.1 IRS - 34 The Enterprise Self-Assistance Participation Rate (ESAPR) represents the percent of taxpayers who use one of the IRS’s selfassistance service channels (e.g., automated calls, web services) versus needing support from an IRS employee (e.g., face-toface, over the phone, or via paper correspondence). The FY 2021 ESAPR was 92.3 percent, exceeding the target by 3.7 percent. The web services that had the largest percent change are: Where’s My Amended Return (226.4 percent); Online Accounts Sessions (117.8 percent); and Get Transcripts Online (108.1 percent). Compared to FY 2020, total services increased by 36.4 percent, self-assisted services increased by 38.9 percent and assisted services rose 12.4 percent. In FY 2022, IRS will update the existing Online Payment Agreements (OPA) and Installment Agreements (IA) applications to include business taxpayers and include a new chatbot application for OPAs and IAs for small business and self-employed taxpayers. The IRS expects to achieve a target of 91 percent for FY 2022 and 91 percent for FY 2023. FY 2023 Changes by Budget Activity Dollars in thousands Pre-Filing Taxpayer Assistance & Education FY 2022 Annualized CR (ACR) Changes to Base: FTE Amount 5,536 Maintaining Current Levels (MCLs) Pay Annualization (2.7% average pay raise) $720,276 $26,645 4,185 Pay Raise (4.6% average pay raise) 21,536 Non-Pay 924 Base Adjustment Adjustment to Reach Current Operating Levels Subtotal FY 2022 Changes to Base FY 2022 Current Services $5,952 5,952 $32,597 5,536 Program Increases: Putting Taxpayers First $752,873 81 17,649 81 350 17,649 33,351 Total FY 2023 Request 431 5,967 $51,000 $803,873 Dollar/FTE Change FY 2023 Request over FY 2022 ACR Percent Change FY 2023 Request over FY 2022 ACR 431 $83,597 7.79% 11.61% Taxpayer Experience Strategy Enhance Taxpayer Service Subtotal FY 2023 Program Increases This table does not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. IRS - 35 2.1.1 – Budget and Performance Report and Plan Dollars in thousands Pre-Filing Taxpayer Assistance & Education FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Resource Level Annualized CR Request Actual Actual Actual Actual Actual Appropriated Resources1 $594,962 $640,379 $621,907 $632,893 $658,344 $720,276 $803,873 Reimbursable Resources2 4 260 118 578 142 191 201 $594,966 $640,639 $622,025 $633,471 $658,486 $720,467 Budget Activity Total 1 The FY 2017 - FY 2021 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers. $804,074 User Fees2 2 The FY 2017 - FY 2021 columns represent realized resources for reimbursables and user fees. Pre-Filing Taxpayer Assistance & Education FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2021 FY 2022 FY 2023 Measure Actual Actual Actual Actual Actual Target Target Target Timeliness of Critical Filing Season Tax Products to the Public (Ot, L) 93.1% 59.6% 92.6% 78.4% 92.0% 85.0% 89.0% 89.0% Timeliness of Critical TE/GE & Business Tax Products to the Public (Ot, L) 96.7% 100.0% 96.1% 96.0% 92.9% 85.0% 89.0% 89.0% Enterprise Self Assistance Participation Rate (E, L)3 79.0% 82.0% 85.4% 90.6% 92.3% 89.0% 91.0% 91.0% Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Strategic Goal Measure 3 In FY 2017, the IRS renamed the Taxpayer Self Assistance Rate measure to Enterprise Self Assistance Participation Rate. 2B – Filing and Account Services ($2,581,850,000 in direct appropriations, $47,049,000 from reimbursable programs, and $78,900,000 from user fees): This budget activity funds direct labor and non-labor expenses that provide filing and account services to taxpayers, process paper and electronically submitted tax returns, issue refunds, and maintain taxpayer accounts. The public continues to file more returns electronically (approximately 93.6 percent of individual returns were filed electronically during the 2021 filing season). The program activities include: • • • • • • • • Filing and Account Services Management administers filing and account services programs. Submission Processing processes paper and electronically submitted tax returns and supplemental documents, accounts for tax revenue, processes information documents, and issues refunds and tax notices. Account Management and Assistance – Electronic/Correspondence Assistance provides education and assistance to taxpayers and resolves accounts and notice inquiries through telephone, paper, and internet correspondence. Electronic Products and Services Support (EPSS) provides centralized operations and support capabilities for the IRS suite of electronic products, including e-help desk, technology support, and operations support. Electronic Tax Administration (ETA) markets and administers electronic tax administration products and services. Business Performance Lab initiates, recommends, and manages systemic solutions for the detection and treatment of improper refunds while ensuring effective treatment for payment of valid refund claims, leads the development of innovative business processes and technology solutions and represents Return Integrity & Compliance Services (RICS) interest in support of the service-wide revenue protection strategy. Health Care Tax Administration provides funds to administer the health insurance tax credit portion of the Trade Adjustment Assistance Reform Act of 2002. Joint Operations Center (JOC) provides service, support, and technology for telephone, correspondence, and electronic media inquiries; real time monitoring and routing of inbound calls; monitoring of Customer Service Representative (CSR) accuracy; and management of the enterprise telephone database. IRS - 36 Description of FY 2021 Performance – Filing and Account Services In FY 2021, Customer Accuracy – Tax Law, the IRS answered 92.8 percent of tax law questions over the telephone correctly, exceeding the target of 90.0 percent by 3.1 percent. IRS will continue to monitor results through data-driven analysis of reports to achieve future goals. Ongoing efforts have and will continue to focus on production meetings with field sites, promoting coding consistency of product reviews, and providing training to managers and employees to ensure quality service to customers. For FY 2022 and FY 2023, the IRS set the Tax Law Accuracy target at 89.0 percent. For Customer Accuracy – Accounts, the IRS answered 93.0 percent of account questions over the telephone correctly, exceeding the FY 2021 target of 91.0 percent. IRS will continue to monitor results through data-driven analysis of reports to achieve future goals. Ongoing efforts have and will continue to focus on production meetings with field sites, promoting coding consistency of product reviews, and providing training to managers and employees to ensure quality service to customers. For FY 2022 and FY 2023, the IRS set the Accounts Accuracy target at 89.0 percent. Figure 2.2 The Customer Service Representative (CSR) Level of Service (LOS) measures the relative success rate of taxpayers wanting to speak with a CSR. In FY 2021, CSR LOS was 18.5 percent, falling short of the 32.0 percent target. New legislation resulted in added, unplanned demand for toll-free assistance. Compared to FY 2020, total assistor demand was up more than 200.0 percent, with some lines seeing increases of more than 2 million calls. Despite these challenges, the IRS was able to answer 3.8 million more calls in FY 2021 than the prior year. The IRS will continue to monitor demand in real time and shift staff between telephones and paper processing to address demand. During the pandemic, IRS processed more than 450 million Economic Impact Payments and over 200 million advance payments of the Child Tax Credit. Prioritizing pandemic response, combined with pandemic disruptions to on-site work, delayed tax return processing, taxpayer correspondence, and other critical services, resulting in unprecedented increases in correspondence inventory levels. As a result, the IRS lowered its FY 2022 LOS target to 30.0 percent, in order, to devote more resources towards processing correspondence inventory. With the additional resources requested in this budget, the IRS will increase the FY 2023 LOS target to 85.0 percent assuming phone demand returns to pre-pandemic levels the IRS can provide in-person services at pre-pandemic levels and as inventories are expected to reach normal levels. IRS - 37 Figure 2.3 The Taxpayers Satisfied with the IRS indicator, the All-Individual Tax Filers Score, is based on the annual American Customer Satisfaction Index (ACSI) Survey, which is the only uniform, cross-industry/government measure of customer satisfaction with the quality of goods and services available to U.S. residents. The measure is calculated as a weighted combination of the ACSI Individual Electronic Tax Filer and Individual Paper Tax Filer Customer Satisfaction Index scores based on a 100-point scale. The Taxpayers Satisfied with the IRS measure declined four points in 2021 to 70 as shown above, due to a statistically significant decrease in the electronic filer score, following impacts from the COVID-19 pandemic. IRS - 38 FY 2023 Changes by Budget Activity Dollars in thousands Filing and Account Services FY 2022 Annualized CR (ACR) FTE Amount 22,454 $2,043,330 Changes to Base: Maintaining Current Levels (MCLs) $81,986 Pay Annualization (2.7% average pay raise) 12,920 Pay Raise (4.6% average pay raise) 66,480 Non-Pay 2,586 Base Adjustment 825 Adjustment to Reach Current Operating Levels Subtotal FY 2023 Changes to Base $84,333 825 84,333 FY 2023 Current Services 825 23,279 $166,319 $2,209,649 Program Increases: Putting Taxpayers First 111 101,385 111 3,508 20,385 270,816 User Authentication 81,000 Taxpayer Experience Strategy Enhance Taxpayer Service Subtotal FY 2023 Program Increases 3,619 $372,201 Total FY 2023 Request 26,898 $2,581,850 Dollar/FTE Change FY 2023 Request over FY 2022 ACR 4,444 $538,520 Percent Change FY 2023 Request over FY 2022 ACR 19.79% 26.36% This table does not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. IRS - 39 2.1.2 – Budget and Performance Report and Plan Dollars in thousands Filing and Account Services FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Resource Level Actual Actual Actual Actual Actual Annualized CR Request $1,564,488 30,147 $1,712,511 34,905 $1,872,175 62,794 $1,901,467 72,769 $1,927,220 39,307 Appropriated Resources1 Reimbursable Resources2 $2,043,330 44,809 $2,581,850 47,049 User Fees 40,553 69,987 3,900 64,900 78,900 $1,635,188 $1,817,403 $1,938,869 $1,974,236 $2,031,427 $2,167,039 Budget Activity Total 1 The FY 2017 - FY 2021 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers. 78,900 $2,707,799 2 2 The FY 2017 - FY 2021 columns represent realized resources for reimbursables and user fees. Filing and Account Services FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2021 FY 2022 FY 2023 Measures Actual Actual Actual Actual Actual Target Target Request Customer Accuracy - Tax Law (Phones) (Ot) 96.7% 95.5% 91.6% 91.0% 92.8% 90.0% 89.0% 89.0% Customer Accuracy - Accounts (Phones) (Ot) 96.0% 96.1% 94.3% 93.5% 93.0% 91.0% 89.0% 89.0% Customer Service Representative (CSR) Level of Service (LOS) (Oe) 77.1% 75.9% 65.4% 53.1% 18.5% 32.0% 30.0% 85.0% Taxpayers Satisfied with the IRS (based on a 100 point scale) (Ot, L)4 74 74 73 74 70 Indicator Indicator Indicator 3 Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Strategic Goal Measure 3 The CSR LOS includes toll-free telephone lines answered by Accounts Management assistors only. These lines service 82 percent of all telephone traffic. Achieving the FY 2023 LOS target of 85 percent requires timely enactment of appropriations so the IRS can complete hiring and training ahead of the filing season and assumes that demand and in person services return to pre-pandemic levels. The IRS’s Automated Collection System (ACS) toll-free line is used by taxpayers for compliance related inquiries. For FY 2021, the ACS LOS was 37.8 percent. These are both included in the Enterprise LOS, which measures the relative success rate of taxpayers calling to speak with an IRS Assistor on any IRS toll-free telephone line. The Enterprise LOS in FY 2021 was 21.3 percent. 4 Based on the American Customer Satisfaction Index (ACSI) survey; the All-Individual Tax Filer score is calculated from separate ACSI Individual Paper Filer and Electronic Filer customer satisfaction index scores; available on an annual basis at the end of January and computed on a 100-point scale. IRS - 40 Enforcement Appropriation Description The Enforcement appropriation provides funding for the examination of tax returns, both domestic and international; administrative and judicial settlement of taxpayer appeals of examination findings; technical rulings; monitoring of employee pension plans; determination of qualifications of organizations seeking tax-exempt status; examination of tax returns of exempt organizations; enforcement of statues relating to detection and investigation of criminal violations of the internal revenue laws; identification of underreporting of tax obligations; securing of unfiled tax returns; collection of unpaid accounts; and supporting activities. The Enforcement budget request for FY 2023 is $5,861,649,000 in direct appropriations and 38,607 FTE, excluding the proposed technical adjustment. This amount is an increase of $857,027,000 or 17.12 percent, and 3,003 FTE or 8.43 percent more than the FY 2022 ACR of $5,004,622,000 and 35,604 FTE. It is important to note, as mentioned in the introduction, although not included in the request, the IRS along with the Administration are still committed to the attainment of multi-year funding for an extensive enforcement program initiative that will generate and protect billions of dollars in additional revenue while reducing the tax gap. IRS - 41 2.1 – Budget Adjustments Table Dollars in thousands Enforcement Summary of Proposed FY 2023 Request FTE FY 2022 Annualized CR (ACR) 35,604 Amount $5,004,622 Changes to Base: $202,663 Maintaining Current Levels (MCLs) Pay Annualization (2.7% average pay raise) 32,228 Pay Raise (4.6% average pay raise) 165,832 Non-Pay 4,603 358 Base Adjustment $229,176 358 229,176 Subtotal FY 2023 Changes to Base 358 $431,839 FY 2023 Current Services 35,962 $5,436,461 152 54,331 Taxpayer Experience Strategy 152 54,331 Ensure Fairness of the Tax System Adjustment to Reach Current Operating Levels Program Changes: Program Increases Putting Taxpayers First 2,493 370,857 Subtotal FY 2023 Program Increases 2,645 $425,188 Total FY 2023 Budget Request 38,607 $5,861,649 See footnotes in 1.1 -- Appropriations Detail Table This table does not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. IRS - 42 2.2 – Object Classification Obligations Dollars in thousands Enforcement Object Classification 11.1 Full-Time Permanent Positions FY 2021 Operating Plan FY 2022 Annualized CR FY 2023 Request 3,130,581 3,206,471 3,629,712 11.3 Other than Full-Time Permanent Positions 26,773 21,384 22,901 11.5 Other Personnel Compensation 145,294 145,755 162,644 11.8 Special Personal Services Payments 29,500 19,739 38,741 11.9 Personnel Compensation (Total) 3,332,148 3,393,349 3,853,999 12.1 Personnel Benefits 1,327,649 1,380,796 1,563,995 323 358 373 $4,660,120 $4,774,503 $5,418,366 21.0 Travel 55,527 60,269 118,808 22.0 Transportation of Things 8,581 8,300 21,349 23.2 Rent Payments to Others 282 243 268 23.3 Communications, Utilities, & Misc. 4,208 5,880 6,140 24.0 Printing & Reproduction 2,770 2,982 3,402 25.1 Advisory & Assistance Services 173,410 50,446 121,080 25.2 Other Services 34,826 31,962 69,407 25.3 Purchase of Goods & Services from Govt. Accounts 30,394 33,322 42,155 5 4 4 125 119 9,470 13.0 Benefits to Former Personnel Total Personnel and Compensation Benefits 25.4 Operation & Maintenance of Facilities 25.6 Medical Care 25.7 Operation & Maintenance of Equipment 1,966 1,762 8,446 26.0 Supplies and Materials 20,830 19,381 22,625 31.0 Equipment 6,108 7,027 11,498 42.0 Insurance Claims & Indemnities 970 922 941 91.0 Unvouchered 4,500 7,500 7,690 Total Non-Personnel $344,502 $230,119 $443,283 New Appropriated Resources $5,004,622 $5,004,622 $5,861,649 Investigations 698,193 667,279 785,121 Exam & Collections 4,120,886 4,160,748 4,883,575 Budget Activities: Regulatory New Appropriated Resources 185,543 176,595 192,953 $5,004,622 $5,004,622 $5,861,649 34,989 35,604 38,607 FTE See footnotes in 1.1 -- Appropriations Detail Table Note 1: This table does not include the proposed technical adjustment that would move certain support activities from Operations Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operations Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. Note 2: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2) IRS - 43 2.3 – Appropriation Detail Table Dollars in thousands Change % Change FY 2022 to FY 2023 Request FY 2022 to FY 2023 Request FTE FTE Enforcement Appropriated Resources FY 2021 Operating Plan FTE AMOUNT FY 2022 Annualized CR FTE FY 2023 Request AMOUNT FTE AMOUNT AMOUNT AMOUNT New Appropriated Resources: Investigations 3,012 678,193 2,965 667,279 3,223 785,121 258 117,842 8.70% 17.66% Exam and Collections 30,987 4,170,886 31,615 4,160,748 34,331 4,883,575 2,716 722,827 8.59% 17.37% 990 155,543 1,024 176,595 1,053 192,953 29 16,358 2.83% 9.26% 34,989 $5,004,622 35,604 $5,004,622 38,607 $5,861,649 3,003 $857,027 8.43% 17.12% 3,891 80 57,000 84 59,850 4 2,850 5.00% 5.00% Regulatory Subtotal New Appropriated Resources Other Resources: Reimbursables 101 Offsetting Collections - Non Reimbursable 59,965 10,000 User Fees 54 Recovery from Prior Years 1,670 1,453 1,453 3,175 3,175 252,301 2,000 140 140 Recoveries Paid Unobligated Balances from Prior Years 544 254,643 Transfers In/Out Resources from Other Accounts 10,500 500 5.00% (54) -100.00% (250,301) -99.21% 331 113,931 433 88,951 787 108,455 354 19,504 81.76% 21.93% Subtotal Other Resources 976 $434,100 513 $413,074 871 $185,573 358 ($227,501) 69.79% -55.08% Total Budgetary Resources 35,965 $5,438,722 36,117 $5,417,696 39,478 $6,047,222 3,361 $629,526 9.31% 11.62% See footnotes in 1.1--Appropriations Detail Table Note: The new appropriated resources in this table do not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.6 million. 2C – Investigations ($785,121,000 in direct appropriations, and an estimated $55,922,000 from reimbursable programs): This budget activity funds the Criminal Investigation (CI) programs that explore potential criminal and civil violations of tax laws; enforce criminal statutes relating to violations of tax laws and other financial crimes; and recommend prosecution as warranted. The program activities include: • • • • • • General Management and Administration supports the headquarters management activities of strategic planning, communications, finance, and human resources for CI activities. Identity Theft, through CI's collaboration with internal and external business partners, combats the inherent risks of Stolen Identity Refund Fraud (SIRF) by focusing on significant tax investigations, prosecutions to maximize deterrence, and preventing the IRS from issuing fraudulent refunds. CI supports the enforcement of criminal statutes relating to violations of internal revenue laws and other financial crimes. CI investigates cases of suspected intent to defraud involving both legal and illegal sources of income and recommends prosecution as warranted. This includes the investigation and prosecution of tax and moneylaundering violations associated with narcotics organizations. Criminal Tax Legal Support provides legal advice and support from IRS Counsel to CI. International Investigations supports international investigations involving U.S. citizens residing abroad, nonresident aliens, expatriates (U.S. citizens living abroad who have renounced their citizenship), and investigations involving other international issues, including legal support (e.g., Foreign Tax Credit and Foreign Earned Income Exclusion, Corporations, Non-Profits, Pension Plans, etc.). Cybersecurity supports CI’s cyber-efforts around inherent risks to CI’s networks and systems, while focusing enforcement and investigative actions on the criminals that pose those threats. This activity also supports security IRS - 44 program management that protects the safeguarding of all data and systems within CI while adhering to all federal regulatory security compliance mandates and local security policies. Description of FY 2021 Performance – Investigations Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law. CI uses the following measures to evaluate its success in achieving its mission. Figure 2.4 In FY 2021, CI completed 2,766 Criminal Investigations, exceeding the year-end target of 2,600 by 6.4 percent. Cases of a Legal nature completed decreased 14.1 percent compared to the same period in FY 2020, while Illegal and Narcotics cases increased 12.4 percent and 25.9 percent, respectively. Legal source cases include people that earn their income legally, but willfully violate the tax laws (tax evasion). Examples of illegal cases include embezzlement, mortgage fraud, telemarketing fraud, and money laundering. Narcotics cases are similar to illegal cases; however, these cases are specific to profits and financial gains of organized drug groups involved in narcotics, narcotics trafficking, and money laundering. Although Criminal Investigations Completed increased compared to last year, COVID-19 continues to impact day-to-day investigative activities thereby contributing to a higher cycle time for investigations completed. Based on projected staffing levels, setbacks and challenges presented due to the COVID-19 pandemic and its impact on future performance, IRS set a target of 2,600 for FY 2022 and 2,500 for FY 2023. IRS - 45 Figure 2.5 The FY 2021 Conviction Rate of 89.4 percent was 2.8 percent below the year‐end target of 92.0 percent while convictions are up 6.4 percent. The COVID-19 pandemic continues to limit court availability throughout the country and impact day-today investigative activities in support of the judicial system thereby contributing to fewer cases being processed. Additionally, decreases in the number of special agents in previous years has led to a decline in the total amount of cases initiated and consequently recommended for prosecution. Despite this, appropriate case selection and effective field performance continue to positively affect the quality of cases resulting in convictions. The IRS will keep the Conviction Rate targets for FY 2022 and FY 2023 at 92 percent. IRS - 46 Dollars in thousands Investigations FTE FY 2022 Annualized CR (ACR) Changes to Base: Maintaining Current Levels (MCLs) Pay Annualization (2.7% average pay raise) Pay Raise (4.6% average pay raise) Non-Pay Base Adjustment Adjustment to Reach Current Operating Levels Subtotal FY 2023 Changes to Base FY 2023 Current Services Amount 2,965 $667,279 30 30 30 2,995 $25,934 3,955 20,352 1,627 16,996 16,996 $42,930 $710,209 Program Increases: Putting Taxpayers First 9 3,529 Total FY 2023 Request 9 219 228 3,223 3,529 71,383 $74,912 $785,121 Dollar/FTE Change FY 2023 Request over FY 2022 ACR Percent Change FY 2023 Request over FY 2022 ACR 258 8.70% $117,842 17.66% Taxpayer Experience Strategy Ensure Fairness of the Tax System Subtotal FY 2023 Program Increases This table does not include the proposed technical adjustment that would move certain support activities from Operation Support and charge the full cost of certain mission activities to the Taxpayer Services and Enforcement appropriations. The adjustment would reduce the Operation Support appropriation by $709.5 million for rent and CFO adjustments and increase the Taxpayer Services appropriation by $298.9 million and the Enforcement appropriation by $410.7 million. 2.1.3 – Budget and Performance Report and Plan Dollars in thousands Investigations Resource Level Appropriated Resources1 Reimbursable Resources2 User Fees2 Budget Activity Total FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY2022 FY 2023 Request Actual Actual Actual Actual Actual Annualized CR $589,295 33,618 $581,680 28,295 $595,686 27,749 $619,227 41,233 $630,093 1,950 $667,279 53,259 $785,121 55,922 $622,913 $609,975 $623,435 $660,460 $632,043 $720,538 $841,043 1 The FY 2017 - FY 2021 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers. 2 The FY 2017 - FY 2021 columns represent realized resources for reimbursables and user fees. Investigations Measures FY 2017 Actual FY 2018 Actual FY 2019 Actual FY 2020 Actual FY 2021 Actual FY 2021 Target FY 2022 Target FY 2023 Target Criminal Investigations Completed (Ot) 3,089 3,051 2,797 2,624 2,766 2,600 2,600 2,500 Conviction Rate (Oe) 91.5% 91.7% 91.2% 90.4% 89.4% 92.0% 92.0% 92.0% Key: Oe - Outcome Measure, Ot - Output/Workload Measure 2D – Exam and Collections ($4,883,575,000 in direct appropriations, and an estimated $3,062,000 from reimbursable programs): This budget activity funds programs that enforce the tax laws and increase compliance through examination and collection programs that ensure proper payment and tax reporting. This budget activity also includes campus support of the Questionable Refund program and appeals, and litigation activities associated with exam and collection. The program activities include: IRS - 47 • • • • • • • • • • • • • • • • Compliance Services Management supports management associated with exam and compliance program activities. Payment Compliance – Correspondence Collection supports IRS collection activities by initiating contact and collecting delinquent taxpayer liabilities through written notices and other means. Automated Collections and Support initiates contact and collects delinquent taxpayer liabilities through the centralized Automated Collection System (ACS). Payment Compliance – Field Collection conducts field investigations and collection efforts associated with delinquent taxpayer and business entity liabilities, including direct taxpayer contact and outreach programs to protect the interest of the federal government in delinquent tax liability situations. Tax Reporting Compliance – Document Matching supports the Automated Underreporter (AUR), Combined Annual Wage Reporting (CAWR), Federal Unemployment Tax Act (FUTA), and other document matching programs. Tax Reporting Compliance – Electronic/Correspondence Exam initiates written correspondence with taxpayers related to tax issues arising from claims on their tax returns. Tax Reporting Compliance – Field Exam compares taxpayer income levels and corresponding tax liabilities to ensure the accuracy of taxpayer returns. Fraud/Bank Secrecy Act enforces the anti-money laundering provisions of the Bank Secrecy Act of 1970 (BSA) and the USA Patriot Act of 2001. It examines non-bank financial institutions for compliance with these laws, receives and processes more than 15 million financial reports annually, and manages a centralized database of that information for the Financial Crimes Enforcement Network. The Fraud program follow [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A92def6d193c3da29. Public record. Not legal advice.